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We are someway through the process of purchasing a house but our solicitor has found an issue. Its a bit complex.

The Freeholder is not registered with the Land Registry and the house is being sold on the basis of a Good Leasehold Title with Good leasehold Indemnity Policy, the house on a long lease around 700 yrs remaining with a peppercorn rent. We very much wanted to buy the freehold so wanted to know likely costs given the situation. We have been digging and digging to find out more information and this is so far what we understand.

Th deeds were accidentally destroyed (no date given). The ground rent is being collected by a lady (Mrs A) who is the executor of the estate of the deceased person (Mrs B) who we assume was the previous freeholder (we do not know if Mrs B deceased was ever registered as the freeholder either). Mrs A claims to be the freeholder we have seen a letter of probate that indicates that she is the executor and I think it says she is also the recipient of the estate. In a further letter 2008 she was given permission to collect rents by her co executor. This letter of probate was issued in 2007 and nothing has been done to formally register in over 10 yrs, presumably because its costly and a legal hassle. This is one of the areas I am a bit confused by but - It looks as though probate has not moved to disposition (??) as the rents are still being collected on behalf of the estate of the late Mrs B.

We have read the Land Registry guidelines and to upgrade the title first Register the house the person who claims to be the freeholder would have to provide evidence that they have claim to be the freeholder, and in circumstances where the title deeds have been lost or destroyed, it is likely that the Land Registry will only grant either a “possessory title” or a “qualified title” rather than a “title absolute”, where the Land Registry guarantee the ownership.

This all assumes they would wish to upgrade the title, so far all the information we have received is that Mrs A is not in the position to sell the freehold.

Assuming she did go through the first registration process and gained a Possessory title, there would then be a wait around 12 years before it could be upgraded to title absolute, and I assume we could not move purchase the freehold until then.

Mortgage lenders currently only lend on Possessory titles or Good Leasehold titles with an indemnity in place not all lenders will accept Indemnities I believe. Our solicitor has said walk away as its likely to be costly, complicated and would be a massive hassle. She believes it could affect its value and ability to sell on. We assume as our solicitor has advised we do not purchase so other solicitors may also do the same? However the sellers solicitor and sellers EA says this is common and we are worrying over nothing.

There is nothing legally to stop you from purchasing possessory or qualified title.

However, there is a risk that some third party might come along and claim to be the 'true' owner of the freehold. That is why mortgage lenders might be less happy to lend against possessory title.

If you are able to secure an indemnity policy at reasonable cost, that might be a good way forward. I suspect future buyers would be able to do the same.

You could also consider getting a mortgage against the lease, and purchase the freehold separately in cash.

It might still be worth going ahead if you are able to get the mortgage and if you plan to be in the property for some time, or accept that buyers could have a similar problem if you want to sell before 12 years are up.

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